New Tullow oil plan set to cost Sh290 billion

Tullow Oil plans a phased approach in developing its Turkana oil fields in a new Sh290 billion investment.

The British exploration firm said yesterday it would subsequently start commercial oil production tentatively by 2021 or 2022.

Under the plan it described as the foundation stage, the Ngamia field - where the popular Ngamia 1 well that had the first substantial discovery is located - and the Amosing field will be developed.

The two wells are expected to produce a total of 230 million barrels of oil. The other five fields where the firm has been exploring for oil in Lokichar (Twiga, Etom, Erut, Agete and Ekales) will follow in subsequent phases.

The firm said in its annual financial results for the year to December 2017 published yesterday it would also build a central processing facility that will produce up to 80,000 barrels of oil per day (bopd).

The processing facility will be linked to the planned pipeline that will link the fields to the proposed Lamu Port.

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Tullow said part of the estimated Sh290 billion to be used in the foundation stage would go towards building the production facility while Sh110 billion would go towards building a new pipeline.

The Energy and Petroleum Ministry has previously projected the pipeline to cost Sh200 billion, with the Government expected to partly finance the project.

The British firm said the Amosing and Ngamia fields were located close to each other and thus require low investments for developing required infrastructure.

Tullow Oil and its partners (Total SA and Africa Oil), as well as the Government, will jointly decide on the capital investments needed to move the country into an oil exporter in 2019 when they make the final investment decision.

“Tullow and its joint venture partners have proposed to the Government of Kenya that the Amosing and Ngamia fields should be developed as the foundation stage of the South Lokichar development.

This stage would include a 60,000 to 80,000 bopd central processing facility,” said the firm.